Yoga Limited v Evolution Trustee Limited

[2024] NZHC 1764

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-2752

[2024] NZHC 1764

UNDER

Property Law Act 2007

IN THE MATTER OF

A Commercial Lease

BETWEEN

YOGA LIMITED

Plaintiff

AND

EVOLUTION TRUSTEE LIMITED

Defendant

Hearing:	On the papers at Auckland
Judgment:	2 July 2024

JUDGMENT OF POWELL J

[Costs]

YOGA LIMITED v EVOLUTION TRUSTEE LIMITED [2024] NZHC 1764 [2 July 2024]

[1]    The plaintiff, Yoga Limited (“Yoga”), commenced proceedings in November 2023 so as to prevent the defendant, Evolution Trustee Limited (“Evolution”) from cancelling Yoga’s lease over studio premises in Commerce Street, Auckland.

[2]    Shortly before the hearing of Yoga’s application for interim relief in February 2024, Yoga confirmed through its director that the premises had been vacated, the application was no longer pursued and the only remaining issue was the costs of the proceedings.

[3]    The parties have endeavoured to reach agreement on costs but have been unsuccessful. Evolution seeks indemnity costs in the sum of $21,655 together with disbursements of $290, a total sum of $21,945.

[4]    Yoga does not dispute that indemnity costs are appropriately payable under its lease with Evolution. However, while Yoga accepts Evolution has a contractual right to indemnity costs, it submits that Evolution is only entitled, in the context of a costs application following the withdrawal/abandonment of Yoga’s application, to claim costs in relation to this proceeding and not costs for recovery of rental which will be sought in separate proceedings yet to be filed.

[5]    Yoga has also claimed that not all of the sums claimed by Evolution are reasonable with reference to scale costs on a 2B basis, such that overall Yoga considers the maximum amount of costs payable by it is $11,500. Finally, Yoga submits that as it has previously offered to pay costs in the total sum sought by Evolution, albeit by way of instalments over six months, and the offer was rejected, then to the extent that costs are subsequently determined to be less than $21,945 Yoga submits that a further reduction should be made on account of its offer.

Discussion

[6]    Having considered the submissions of the parties, I agree with Yoga that the costs sought by Evolution must have a causal nexus to the proceedings brought by Yoga.1     As a result, I agree that amounts unrelated to responding to the narrow

1      The position that costs from multiple proceedings should not be mixed, particularly where some of those proceedings have not been commenced and/or concluded, aligns with the principle that

application filed by Yoga are not recoverable by way of costs in these proceedings. The analysis by Yoga on this issue is not contradicted and I accept it for the purposes of the application, meaning that $5,800 must be deducted from the amount sought by Evolution on the present proceedings.

[7]    Conversely, I do not consider that there is sufficient information for me to conclude that the amounts claimed by Evolution are otherwise unreasonable such that the further deductions submitted by Yoga are appropriate. In particular, I do not consider that reference to 2B scale costs are particularly helpful in this case and instead consider the further deductions proposed by Yoga to be arbitrary.

[8]    Finally, I do not accept that a further deduction is warranted as a result of Yoga’s settlement offer. First, the settlement was proposed to be paid over a period and, secondly, while I conclude that the total amounts are not properly payable in the context of the present proceedings it does not mean that they are not ultimately payable by Yoga to Evolution as Yoga’s offer indeed recognised.

Decision

[9]    Yoga is to pay costs in the present proceedings in the sum of $15,855 plus disbursements of $290, a total of $16,145. Nothing in this judgment means that Evolution is not able to claim the balance of the costs sought in these proceedings in future proceedings against Yoga for recovery of rental and such other relief under the lease as it may be entitled.

Powell J

costs should be predictable and expeditious. It also corresponds with the wording of rr 14.2 and, especially, 15.23 of the High Court Rules 2016, which provide for costs in relation to “a” or “the” proceeding.